Compensation Or Loss Suffered Should Be Pleaded And Established: Delhi HC Upholds Arbitration Award Rejecting Claims Against DDA
The Delhi High Court, while upholding an Arbitral Award rejecting certain claims against Delhi Development Authority, observed that a claimant has to plead and establish the loss suffered by him.
The Appellant, in the present matter, had challenged the order passed by the Commercial Court which was rendered in the context of the disputes that had arisen between the Appellant and the DDA for the repair of some quarters.
The Division Bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju observed “The First Arbitrator had observed in the said order that the delay in execution of the work was attributable to the DDA and thus, undoubtedly the appellant had a cause of action for claiming compensation or loss suffered by it on that count. The Arbitral Tribunal also found in favour of the appellant in this regard. However, the Arbitral Tribunal found that the appellant had failed to plead and establish the loss suffered by it. Therefore, the Arbitral Tribunal rejected the appellant’s claim in this regard… We are not persuaded to accept that there are any grounds to interfere with the impugned award within the scope of Section 34 of the A&C Act.”
Advocate G.L. Verma appeared for the Petitioner while Advocate Aakanksha Kaul appeared for the Respondents.
In the present matter, the Appellant had raised a bill for the works done as per market rates derived by it and not as per the rates agreed between the parties. The Appellant claimed that there was a delay of 458 days in completing the works and he is liable to be compensated for the same.
The Bench referred to the relevant extract from the impugned award, “76. Arbitration is a creation of the contract between the parties. The Claimant was required to plead and prove that time was the essence of the contract. That the Claimant suffered losses due to delay caused on account of the Respondent. The Claimant was also required to plead and prove that he took all necessary steps to mitigate the losses for which the claim has been filed. The Claimant was required to plead and prove if there was any escalation clause in the contract.”
The Court also observed the conduct of proceedings and discussed the rejection of DDA’s Claim that there were justifiable grounds to doubt the independence and impartiality of the First Arbitrator under Section 13(2) read with Section 12(3) of the A&C Act.
The Court said “It is important to note that by a prior order, the First Arbitrator had rejected the DDA’s contention to frame the issue regarding cause of action (Issue No.3) as a preliminary issue. The First Arbitrator had held that the said issue was required to be decided after considering the evidence led by the parties. Thus, the observations made in the order dated 07.04.2019 were merely to justify that the decision to not try Issue No.3 as the preliminary issue did not give rise to any doubt as to the independence and impartiality of the First Arbitrator. The appellant’s contention that the said order dated 07.04.2019 precluded any challenge on the merits of the claims raised by the appellant is wholly erroneous.”
Accordingly, the Court favoured the decision of the Commercial Court and hence, dismissed the writ petitions.
Cause Title: Dharamvir & Company v. Delhi Development Authority & Anr. (Neutral Citation: 2024:DHC:2166-DB)
Appearances:
Petitioner: Advocate G.L. Verma
Respondents: Advocates Aakanksha Kaul, Aman Sahai, Yoginder Handoo, Raghvendra
Upadhyay and Vaibhav Tripathi.
